Saturday, May 18, 2024

What Not to Do Before Buying a House

Buying a home can be stressful with everything you have to remember and accomplish in the process. While you may be aware of what to do when buying a home, no one may have told you what not to do.

Don’t Damage Your Credit

Your credit score is a large component of being pre-approved for a mortgage loan. In the beginning of your home buying process, your credit score may be at a good standing. However, if throughout the process you begin to have late payments, cancel credit cards, or make inquiries, your credit score can be negatively affected.

Don’t Miss Payments

In congruence with maintaining or improving your credit score, you will also want to ensure you continue to pay all of your bills on time. The home-buying process can be complicated, and it may be easy to forget a payment during this time. However, it is crucial you remain on top of all of your bills.

If you have a current mortgage loan, you must continue to pay these payments on time as missing a mortgage payment can cause you to become ineligible for an additional loan for up to a year!

Don’t Open Additional Lines of Credit

When the time comes to close on your new home, lenders will be looking at your debt-to-income ratio. If you happen to open a new line of credit, this can be a quick and simple way for you to be disqualified for your previously approved loan.

Don’t Buy a Car

Making a large purchase during the home-buying process can easily cause a delay. Buying or leasing a car can substantially change your debt-to-income ratio. So if possible, waiting until your home-buying process has been completed to purchase a car is something you should highly consider.

Don’t Switch Jobs

While this one may not always be possible, it’s wise to avoid when you can. The reason switching jobs during the mortgage loan process is frowned upon is because it will lead your lender to question your financial stability.

However, if the job change is in a positive direction such as going from part time to full time or from commission to salary, this may not affect your eligibility. It’s always wise to consult with your lender prior to making a change like this.

If you have been considering selling your home to purchase another that better meets your needs, you may be curious as to what costs you may concur. Utilizing a seller closing costs calculator can better help you estimate what types of fees you should expect when putting your home on the market.

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